<PAGE> 1
As filed with the Securities and Exchange Commission on December 3, 1996
Registration No. 333- __________
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
Under the
Securities Act of 1933
CORVEL CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 33-0282651
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1920 MAIN STREET
SUITE 1090
IRVINE, CALIFORNIA 92714
(714) 851-1473
(Address, Including Zip Code, and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)
V. GORDON CLEMONS
CHIEF EXECUTIVE OFFICER AND PRESIDENT
CORVEL CORPORATION
1920 MAIN STREET
SUITE 1090
IRVINE, CALIFORNIA 92714
(714) 851-1473
(Name, Address, Including Zip Code, and Telephone Number
Including Area Code, of Agent for Service)
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Copies to:
GREG T. WILLIAMS, ESQ.
DANIEL E. ROSTON, ESQ.
BROBECK, PHLEGER & HARRISON LLP
4675 MACARTHUR COURT, SUITE 1000
NEWPORT BEACH, CALIFORNIA 92660
(714) 752-7535
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [ ]
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection
with dividend or interest reinvestment plans, check the following
box. [X]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
Title of Each Class of Amount to be Registered Proposed Maximum Proposed Maximum Amount of
Securities to be Offering Aggregate Registration
Registered Price Per Share(1) Offering Price Fee
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value 200,000 shares $25.50 $5,100,000 $1,545
$.0001 per share
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</TABLE>
(1) The price of $25.50 per share, which was the average of the high and
low prices of the Common Stock on the Nasdaq National Market on November
29, 1996, is set solely for the purpose of calculating the registration
fee pursuant to Rule 457(c) of the Securities Act of 1933, as amended.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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200,000 SHARES
CORVEL CORPORATION
COMMON STOCK
($.0001 PAR VALUE PER SHARE)
_______________________________
This Prospectus relates to the public offering, which is not being
underwritten, of 200,000 shares of Common Stock, $.0001 par value per share, of
CorVel Corporation ("CorVel" or the "Company"). All 200,000 shares (the
"Shares") may be offered from time to time by ENStar Inc., a stockholder of the
Company (the "Selling Stockholder" or "ENStar"), for its own account. The
Selling Stockholder is a wholly-owned subsidiary of North Star Universal, Inc.
("North Star").
The Shares may be offered by the Selling Stockholder from time to time
in a transaction or series of transactions in the over-the- counter market, in
a negotiated transaction or transactions, or in a combination of such methods
of sale, at fixed prices which may be changed, at market prices prevailing at
the time of sale, at prices related to prevailing market prices or at
negotiated prices. The Selling Stockholder or its pledgees, donees,
transferees or other successors in interest may effect such transaction or
transactions by selling the Shares to or through broker-dealers and such
broker-dealers may receive compensation in the form of discounts, concessions
or commissions from the Selling Stockholder and/or the purchaser or purchasers
of the Shares for whom such broker-dealers may act as agents or to whom they
sell as principals, or both (which compensation as to a particular
broker-dealer might be in excess of customary commissions). See "Sale of the
Shares."
The Company will not receive any of the proceeds from the sale of the
Shares. The Selling Stockholder has agreed to bear all costs and expenses in
connection with the registration of the Shares.
The Company's Common Stock is quoted on the Nasdaq National Market
under the symbol "CRVL." On November 29, 1996 the average of the high and low
price for the Common Stock was $25.50 per share.
_______________________________
THE COMMON STOCK OFFERED HEREBY HAS A HIGH DEGREE
OF RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 3.
_______________________________
The Selling Stockholder and any broker-dealers or agents that
participate with the Selling Stockholder in the distribution of the Shares may
be deemed to be "underwriters" within the meaning of Section 2(11) of the
Securities Act of 1933, as amended (the "Securities Act"), and any commissions
received by them and any profit on the resale of the Shares purchased by them
may be deemed to be underwriting commissions or discounts under the Securities
Act. See "Sale of the Shares" herein for a description of indemnification
arrangements.
_______________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COM-
MISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
_______________________________
THE DATE OF THIS PROSPECTUS IS DECEMBER ___, 1996
<PAGE> 3
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFERING MADE HEREBY, AND IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY, THE SELLING STOCKHOLDER, NORTH STAR OR BY ANY OTHER
PERSON. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT INFORMATION HEREIN
IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY
SECURITY OTHER THAN THE SECURITIES COVERED BY THIS PROSPECTUS, NOR DOES IT
CONSTITUTE AN OFFER TO OR SOLICITATION OF ANY PERSON IN ANY JURISDICTION IN
WHICH SUCH OFFER OR SOLICITATION MAY NOT LAWFULLY BE MADE.
THE COMPANY
CorVel is a nationwide provider of medical cost containment
and managed care services designed to control the medical costs of workers'
compensation. The Company's services include automated medical fee auditing,
early intervention, utilization review, medical case management, vocational
rehabilitation services, and independent medical examinations. Such services
are provided to insurance companies, third party administrators, and
self-administered employers to assist them in managing the medical costs and
monitoring the quality of care associated with workers' compensation claims.
Workers' compensation regulations vary by state and the
industry is highly fragmented. The Company's specialization in workers'
compensation, breadth of services, information management systems and ability
to offer local services on a nationwide basis enhance its ability to compete in
the workers' compensation market. The Company believes that payors and
employers impacted by the medical costs of workers' compensation continue to
require services and programs to manage such costs. The Company's business
strategy is to continue to expand its range of services, branch office network,
and information management capabilities to respond to this need on both a local
and national level.
The principal executive offices of CorVel are located at 1920
Main Street, Suite 1090, Irvine, California 92714. CorVel's telephone number
is (714) 851-1473.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
THIS PROSPECTUS CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE
MEANING OF THE SECURITIES ACT OF 1933, AS AMENDED, AND THE SECURITIES EXCHANGE
ACT OF 1934, AS AMENDED, INCLUDING, WITHOUT LIMITATION, THE COMPANY'S FUTURE
EXPANSION PLANS; FUTURE DEMAND FOR THE COMPANY'S SERVICES; THE DEVELOPMENT OF
NEW SERVICES BY THE COMPANY; LEGISLATIVE CHANGES; POTENTIAL ACQUISITIONS AND
OTHER STRATEGIC TRANSACTIONS AND OTHER STATEMENTS CONTAINED HEREIN REGARDING
MATTERS THAT ARE NOT HISTORICAL FACTS. THESE FORWARD-LOOKING STATEMENTS INVOLVE
RISKS AND UNCERTAINTIES AND THE COMPANY'S ACTUAL RESULTS MAY DIFFER MATERIALLY
FROM THE RESULTS DISCUSSED IN OR IMPLIED BY SUCH STATEMENTS. FACTORS THAT MIGHT
CAUSE SUCH A DIFFERENCE INCLUDE, BUT ARE NOT LIMITED TO, THOSE DISCUSSED IN
"RISK FACTORS." MOREOVER, PAST FINANCIAL PERFORMANCE IS NOT NECESSARILY A
RELIABLE INDICATOR OF FUTURE PERFORMANCE AND INVESTORS IN THE SECURITIES OFFERED
HEREBY SHOULD NOT USE HISTORICAL PERFORMANCE TO ANTICIPATE FUTURE OPERATING
RESULTS OR FUTURE PERIOD TRENDS.
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RISK FACTORS
In addition to the other information in this Prospectus, the
following factors should be considered carefully in evaluating an investment in
the Shares offered by this Prospectus.
Potential Adverse Impact of Government Regulation. Many
states, including a number of those in which the Company transacts business,
have licensing and other regulatory requirements applicable to the Company's
business. Approximately half of the states have enacted laws that require
licensing of businesses which provide medical review services, such as the
Company. Some of these laws apply to medical review of care covered by
workers' compensation. These laws typically establish minimum standards for
qualifications of personnel, confidentiality, internal quality control, and
dispute resolution procedures. These regulatory programs may result in
increased costs of operation for the Company, which may have an adverse impact
upon the Company's ability to compete with other available alternatives for
health care cost control. In addition, new laws regulating the operation of
managed care provider networks have been adopted by a number of states. These
laws may apply to managed care provider networks having contracts with the
Company or to provider networks which the Company may organize. To the extent
the Company is governed by these regulations, it may be subject to additional
licensing requirements, financial oversight and procedural standards for
beneficiaries and providers. Regulation in the health care and workers'
compensation fields is constantly evolving. The Company is unable to predict
what additional government regulations, if any, affecting its business may be
promulgated in the future. The Company's business may be adversely affected by
failure to comply with existing laws and regulations, failure to obtain
necessary licenses and government approvals or failure to adapt to new or
modified regulatory requirements. Proposals for health care legislative
reforms are regularly considered at the federal and state levels. To the
extent that such proposals affect workers' compensation, such proposals may
adversely affect the Company's business and results of operations. In
addition, changes in workers' compensation laws or regulations may impact
demand for the Company's services, require the Company to develop new or
modified services to meet the demands of the marketplace or modify the fees
that the Company may charge for its services. One of the proposals which has
been considered is 24-hour health coverage, in which the coverage of
traditional employer-sponsored health plans is combined with workers'
compensation coverage to provide a single insurance plan for work-related and
non-work-related health problems. Incorporating workers' compensation coverage
into conventional health plans may adversely affect the market for the
Company's services.
Possible Litigation and Legal Liability. The Company, through
its utilization management services, makes recommendations concerning the
appropriateness of providers' medical treatment plans of patients throughout
the country, and it could share in potential liabilities for adverse medical
consequences. The Company does not grant or deny claims for payment of
benefits and the Company does not believe that it engages in the practice of
medicine or the delivery of medical services. There can be no assurance,
however, that the Company will not be subject to claims or litigation related
to the grant or denial of claims for payment of benefits or allegations that
the Company engages in the practice of medicine or the delivery of medical
services. In addition, there can be no assurance that the Company will not be
subject to other litigation that may adversely affect the Company's business or
results of operations. The Company maintains professional liability insurance
and such other coverages as the Company believes are reasonable in light of the
Company's experience to date. There can be no assurance, however, that such
insurance will be sufficient or available in the future at reasonable cost to
protect the Company from liability which might adversely affect the Company's
business or results of operations.
Competition. The Company faces competition from large
insurers, health maintenance organizations ("HMOs"), preferred provider
organizations ("PPOs"), third party administrators and other managed health
care companies. The Company believes that, as managed care techniques continue
to gain acceptance in the workers' compensation marketplace, CorVel's
competitors will increasingly consist of nationally focused workers'
compensation managed care service companies, insurance companies, HMOs and
other significant providers of managed care products. Legislative reforms in
some states permit employers to designate
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health plans such as HMOs and PPOs to cover workers' compensation claimants.
Because many health plans have the ability to manage medical costs for workers'
compensation claimants, such legislation may intensify competition in the
market served by the Company. Many of the Company's current and potential
competitors are significantly larger and have greater financial and marketing
resources than those of the Company, and there can be no assurance that the
Company will continue to maintain its existing performance or be successful
with any new products or in any new geographical markets it may enter.
Changes in Market Dynamics. Legislative reforms in some
states permit employers to designate health plans such as HMOs and PPOs to
cover workers' compensation claimants. Because many health plans have the
capacity to manage health care for workers' compensation claimants, such
legislation may intensify competition in the market served by the Company.
Within the past few years, several states have experienced decreases in the
number of workers' compensation claims and the average cost per claim which
have been reflected in workers' compensation insurance premium rate reductions
in those states. The Company believes that declines in workers' compensation
costs in these states are due principally to intensified efforts by payors to
manage and control claim costs, to improved risk management by employers and to
legislative reforms. If declines in workers' compensation costs occur in many
states and persist over the long-term, they may have an adverse impact on the
Company's business and results of operations.
Dependence Upon Key Personnel. The Company is dependent to a
substantial extent upon the continuing efforts and abilities of certain key
management personnel including its Chief Executive Officer, V. Gordon Clemons.
In addition, the Company faces competition for experienced employees with
professional expertise in the workers' compensation managed care area. The
loss of, or the inability to attract, qualified employees could have a material
adverse effect on the Company's business and results of operations.
Risks Related to Growth Strategy. The Company's strategy is
to continue its internal growth and, as strategic opportunities arise in the
workers' compensation managed care industry, to consider, and, if appropriate,
make acquisitions of, or enter into strategic relationships with, other
companies. As a result, the Company is subject to certain growth-related risks,
including the risk that it will be unable to retain personnel or acquire other
resources necessary to service such growth adequately. Expenses arising from
the Company's efforts to increase its market penetration have had and may in the
future have a negative impact on operating results. In addition, there can be
no assurance that any suitable opportunities for strategic acquisitions or
relationships will arise or, if they do arise, that the transactions
contemplated thereby will be completed. If such a transaction does occur, there
can no assurance that the Company will be able to integrate effectively any
acquired business into the Company. In addition, any such transaction would be
subject to various risks associated with the acquisition of businesses,
including the financial impact of expenses associated with the integration of
businesses, unknown liabilities related to the acquired business and the
diversion of management resources to the integration of such businesses. There
can be no assurance that any future acquisition or other strategic relationship
will not have an adverse impact on the Company's business or results of
operations. If suitable opportunities arise, the Company anticipates that it
would finance such transactions, as well as its internal growth, through working
capital or, in certain instances, through debt or equity financing. There can
be no assurance, however, that such debt or equity financing would be available
to the Company on acceptable terms when, and if, suitable strategic
opportunities arise. The Company expects that a considerable amount of its
future growth will depend on its ability to process and manage claims data more
efficiently and to provide more meaningful healthcare information to customers
and payors of healthcare. There can be no assurance that the Company will be
able to develop, license or otherwise acquire software to address these market
demands as well as or as timely as its competitors.
Risks Related to Vertical Market Expansion. During the past
fiscal year, the Company has made efforts to increase its presence and revenue
in the group health market with moderate success. Managed care in this market
is more mature than managed care in the workers' compensation market and, as a
result, the Company competes with numerous large, well established companies in
this field including many large HMOs. The Company has limited experience in the
group health market. Accordingly, there can be no assurance that the Company
will be successful in this market.
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Possible Volatility of Stock Price. The market price of the
Company's Common Stock following this offering may be highly volatile. Factors
such as variations in the Company's revenues, earnings and cash flow, general
market trends in the workers' compensation managed care market, announcements of
acquisitions and innovations by the Company or its competitors, the impact of
current or proposed governmental regulations related to the Company's business,
competitive pressures, the loss of key customers, and declines in revenues and
operating margins could cause the market price of the Common Stock to fluctuate
substantially. The Company's quarter to quarter percentage growth in operating
results in a number of the most recent fiscal quarters was lower than the
quarter to quarter growth rates historically experienced by the Company. The
Company's slower growth rates in those quarters was partially attributable to
the decline in revenues from a key customer and a reduction in the growth rate
of health care expenditures nationally, contributing to a reduction in claims
processed by the Company. There can be no assurance that the Company will not
experience further declines in revenues from existing customers or that the
growth rate of health care expenditures will not continue to decline and, as a
result, there can be no assurance that the Company's growth rate in the future,
if any, will be at or near historical levels. In addition, there can be no
assurance that the Company will not experience declines in operating margins and
operating income due to price concessions offered to new and existing customers.
Finally, the stock market has in the past experienced price and volume
fluctuations that have particularly affected companies in the health care and
managed care markets resulting in changes in the market price of the stock of
many companies which may not have been directly related to the operating
performance of those companies. Such broad market fluctuations may adversely
affect the market price of the Company's Common Stock following this offering.
SELLING STOCKHOLDER
The following table sets forth the number of shares of Common
Stock beneficially owned by the Selling Stockholder as of November 11, 1996.
Except as indicated, neither the Selling Stockholder nor its parent company,
North Star, has had a material relationship with the Company within the past
three years other than as a result of the ownership of securities of the
Company. Because the Selling Stockholder may offer some, all or none of the
Shares pursuant to the offering contemplated by this Prospectus, and because
there are currently no agreements, arrangements or understandings with respect
to the sale of any of the Shares, no estimate can be given as to the amount of
shares of Common Stock of the Company that will be held by the Selling
Stockholder after completion of this offering. See "Sale of the Shares." The
Shares offered by this Prospectus may be offered from time to time by the
Selling Stockholder named below:
<TABLE>
<CAPTION>
Number of Shares
Number of Shares Percent of Outstanding Registered for Sale
Name of Selling Stockholder Beneficially Owned Shares Hereby(1)
--------------------------- ------------------ ----------------------- -------------------
<S> <C> <C> <C>
ENStar Inc. 1,237,796(2) 26.5% 200,000
</TABLE>
- --------------
(1) This Registration Statement shall also cover any additional shares
of Common Stock which become issuable in connection with the Shares
registered for sale hereby by reason of any stock dividend, stock
split, recapitalization or other similar transaction effected
without the receipt of consideration which results in an increase
in the number of the Company's outstanding shares of Common Stock.
(2) Includes 1,225,000 shares owned by ENStar, 10,546 shares owned
directly by Mr. Jeffrey Michael, a director of ENStar, North Star
(which owns all of the issued and outstanding shares of capital
stock of ENStar) and the Company, and 2,250 shares subject to
options held by Mr. Michael that are exercisable within 60 days of
November 11, 1996. Excludes 3,750 shares subject to options held
by Mr. Michael that are exercisable after January 10, 1997. Also
excludes (i) 6,000 shares owned directly by Mr. Peter Flynn, a
director of North Star and the Company and Executive Vice President
of ENStar, (ii) 300 shares owned indirectly by Mr. Flynn as
custodian for his minor children, (iii) 2,250 shares subject to
options held by Mr. Flynn that are exercisable within 60 days of
November 11, 1996, and (iv) 3,750 options held by Mr. Flynn that
are exercisable after January 10, 1997. Mr. Michael is the
President and Chief Executive Officer and a stockholder of North
Star. Mr. Michael is also the President and Chief Executive
Officer of ENStar. In addition, Mr. Michael is the managing
general partner of the 3J2R Limited Partnership, a stockholder of
North Star. Based on the foregoing, Mr. Michael may be deemed to
share beneficial ownership of the shares of the
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Company's Common Stock held by ENStar. Mr. Michael disclaims such
beneficial ownership except to the extent of any indirect pecuniary
interest therein. North Star's common stock is traded on the
Nasdaq National Market under the symbol "NSRU." North Star files
periodic reports, proxy statements and other information with the
Securities and Exchange Commission under the Securities Exchange
Act of 1934, as amended, relating to its business, financial
condition and other matters.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale
of Shares by the Selling Stockholders.
SALE OF THE SHARES
The Shares offered hereby may be sold by the Selling
Stockholder or its pledgees, donees, transferees or other successors in
interest from time to time in a transaction or series of transactions in the
over-the-counter market, in negotiated transactions, or in a combination of
such methods of sale, at fixed prices which may be changed, at market prices
prevailing at the time of sale, at prices related to prevailing market prices
or at negotiated prices. The Selling Stockholder or its pledgees, donees,
transferees or other successors in interest may effect such transactions by
selling the Shares to or through broker-dealers, and such broker-dealers may
receive compensation in the form of discounts, concessions or commissions from
the Selling Stockholder and/or the purchasers of the Shares for whom such
broker-dealers may act as agents or to whom they sell as principals, or both
(which compensation as to a particular broker-dealer might be in excess of
customary commissions).
In order to comply with the securities laws of certain states,
if applicable, the Shares will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
Shares may not be sold unless they have been registered or qualified for sale
in the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
The Selling Stockholder and any broker-dealers or agents that
participate with the Selling Stockholder in the distribution of the Shares may
be deemed to be "underwriters" within the meaning of the Securities Act, and
any commissions received by them and any profit on the resale of the Shares
purchased by them may be deemed to be underwriting commissions or discounts
under the Securities Act.
Under applicable rules and regulations under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), any person engaged in
the distribution of the Shares may not simultaneously engage in market making
activities with respect to the Common Stock of the Company for a period of two
business days prior to the commencement of such distribution. In addition and
without limiting the foregoing, the Selling Stockholder will be subject to
applicable provisions of the Exchange Act and the rules and regulations
thereunder, including, without limitation, Rules 10b-6 and 10b-7, which
provisions may limit the timing of purchases and sales of shares of the
Company's Common Stock by the Selling Stockholder.
The Company and the Selling Stockholder have entered into a
Registration Agreement as of November 25, 1996 (the "Registration Agreement")
pursuant to which the Company has agreed, among other things, to register the
Shares under the Securities Act for an effective period of 60 days. In
addition, under the terms of the Registration Agreement, each of the Company
and the Selling Stockholder has agreed to indemnify and hold the other harmless
against certain liabilities under the Securities Act that could arise in
connection with the sale by the Selling Stockholder of the Shares.
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DESCRIPTION OF CAPITAL STOCK
The Company has 21,000,000 shares of authorized capital stock
of which 20,000,000 shares have been designated as Common Stock, $.0001 par
value, and 1,000,000 shares of which have been designated as Preferred Stock,
$.0001 par value. The only capital stock of the Company currently outstanding
are shares of Common Stock. Holders of shares of Common Stock are entitled to
one vote per share on all matters to be voted on by stockholders. Holders of
Common Stock are entitled to receive ratably such dividends as may be declared
by the Board of Directors in its discretion from funds legally available
therefor. In the event of a liquidation, dissolution or winding up of the
Company, holders of Common Stock are entitled to share ratably in all assets
remaining after payment of liabilities. Holders of Common Stock have no
preemptive rights and have no conversion or other subscription rights. There
are no redemption or sinking fund provisions applicable to the Common Stock.
The outstanding shares of Common Stock are, and the Common Stock to be
outstanding upon completion of the offering will be, fully paid and
nonassessable.
At November 11, 1996, the Company had approximately 406
holders of record of its Common Stock and 4,669,509 shares of Common Stock
outstanding.
LEGAL MATTERS
The validity of the securities offered hereby will be passed
upon for the Company by Brobeck, Phleger & Harrison LLP, Newport Beach,
California.
EXPERTS
The consolidated financial statements and financial statement
schedule of CorVel Corporation appearing in CorVel Corporation's Annual Report
(Form 10-K) for the year ended March 31, 1996 have been audited by Ernst &
Young LLP, independent auditors, as set forth in their report included therein
and incorporated herein by reference in reliance upon such report given upon
the authority of such firm as experts in accounting and auditing.
AVAILABLE INFORMATION
CorVel is subject to the informational requirements of the
Exchange Act, and in accordance therewith files reports, proxy statements,
information statements and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy statements and other information
filed by the Company may be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the Commission's Regional Offices located at 75
Park Place, New York, New York 10007 and 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511. Copies of such material can be obtained by mail
from the Public Reference Branch of the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. The Common Stock of
the Company is quoted on the Nasdaq National Market, and reports and other
information concerning the Company may also be inspected at the offices of
National Association of Securities Dealers, Inc., 1735 K Street, N.W.
Washington, D.C. 20006.
The Commission maintains a web site on the Internet
(http://www.sec.gov) that contains reports, proxy and information statements
and other information regarding registrants that file electronically such as
the Company.
The Company has filed with the Commission a registration
statement on Form S-3 (herein, together with all amendments and exhibits,
referred to as the "Registration Statement") under the Securities Act with
respect to the Common Stock offered hereby. This Prospectus does not contain
all of the information set
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forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information regarding the Company and the Common Stock offered hereby,
reference is hereby made to the Registration Statement and to the exhibits and
schedules filed therewith. The Registration Statement, including the exhibits
and schedules thereto, may be inspected at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549 and copies of all or any part thereof may be obtained from such
office upon payment of the prescribed fees.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents of the Company, filed with the
Commission (File No. 0-19291) pursuant to the Exchange Act, are incorporated
herein by reference:
1. The Company's Annual Report on Form 10-K filed as of
June 26, 1996 for the fiscal year ended March 31,
1996;
2. The Company's Proxy Statement filed as of July 1,
1996; and
3. The Company's Quarterly Reports on Form 10-Q filed as
of August 14, 1996 and November 12, 1996 for the
quarters ended June 30, 1996 and September 30, 1996,
respectively.
All reports and other documents subsequently filed by the
Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after
the date of this Prospectus and prior to the termination of this offering shall
be deemed to be incorporated by reference herein and to be a part hereof from
the date of filing of such reports and documents. Any statement contained
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom
a copy of this Prospectus is delivered, upon the request of any such person, a
copy of any or all of the documents which are incorporated herein by reference
(other than exhibits to such information, unless such exhibits are specifically
incorporated by reference into the information this Prospectus incorporates).
Requests should be directed to CorVel Corporation, 1920 Main Street, Suite
1090, Irvine, California 92714, Attention Richard J. Schweppe, Chief Financial
Officer, telephone (714) 851-1473.
CorVel(R) is a registered service mark of the Company.
8
<PAGE> 10
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth an itemized statement of all
estimated expenses in connection with the sale of the securities being
registered:
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee . . . . . . . . . . . . . $1,545
Legal fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,500
Accounting fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . 3,600
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500
--------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $13,145
</TABLE>
All costs and expenses related to the sale of the securities
being registered will be paid by the Selling Stockholder.
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Section 145 of the Delaware General Corporation Law (the
"GCL") authorizes a court to award, or a corporation's Board of Directors to
grant, indemnity to its directors, officers, employees and agents in terms
sufficiently broad to permit indemnification (including reimbursement of
expenses incurred) under certain circumstances for liabilities arising under
the Securities Act.
The Company's Restated Articles of Incorporation, as amended,
and Amended By-laws provide for indemnification of its directors and officers
to the maximum extent permitted by Section 145 of the GCL, as that Section may
be amended and supplemented from time to time. In addition, the Company's
Amended By-laws provide for indemnification pursuant to Section 145 of the GCL
for its employees and other agents.
The Company has entered into Indemnification Agreements with
its directors and certain officers. Insofar as indemnification for liabilities
arising under the Securities Act may be permitted to directors, officers or
persons controlling the Company pursuant to the provisions of the foregoing
agreements, the Company has been informed that in the opinion of the Securities
and Exchange Commission, such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable.
ITEM 16. EXHIBITS.
5.1 Opinion of Brobeck, Phleger & Harrison LLP.
10.1 Form S-3 Registration Agreement between and among CorVel Corporation,
North Star Universal, Inc. and ENStar Inc. entered into as of November
25, 1996.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Brobeck, Phleger & Harrison LLP (included in the Opinion of
Counsel filed as Exhibit 5.1 hereto).
24.1 Power of Attorney (included on page II-3 of this Registration
Statement).
II-1
<PAGE> 11
ITEM 17. UNDERTAKINGS.
The undersigned Company hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this Registration Statement: (i)
to include any prospectus required by Section 10(a)(3) of the Securities Act if
not contained in a report filed under the Exchange Act; (ii) to reflect in the
prospectus any facts or events arising after the effective date of the
Registration Statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement if not contained in a
report filed under the Exchange Act; and (iii) to include any material
information with respect to the plan of distribution not previously disclosed
in the Registration Statement or any material change to such information in the
Registration Statement; and the information required to be included in a
post-effective amendment by (i) and (ii) is contained in periodic reports filed
by the Company pursuant to Section 13 or Section 15 of the Exchange Act that
are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
The undersigned Company hereby undertakes that, for purposes
of determining any liability under the Securities Act, each filing of the
Company's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Company, pursuant to the foregoing provisions, or otherwise, the
Company has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or controlling person of the Company in
the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication
of such issue.
II-2
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities Act, the
Company certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in Irvine, California on this 27th day of November 1996.
CORVEL CORPORATION
By /s/ Richard J. Schweppe
--------------------------------
Richard J. Schweppe
Chief Financial Officer
We, the undersigned officers and directors of CorVel Corporation, do
hereby constitute and appoint Richard J. Schweppe our true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign
any and all amendments to this Registration Statement, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent, full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby, ratifying and
confirming all that said attorney-in-fact and agent, or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
date indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ V. Gordon Clemons Chief Executive Officer, November 27, 1996
- --------------------------------------------------- President and Director
V. Gordon Clemons (Principal Executive Officer)
/s/ Richard J. Schweppe Chief Financial Officer November 27, 1996
- --------------------------------------------------- (Principal Financial Officer)
Richard J. Schweppe
/s/ Thomas R. Brown Director November 27, 1996
- ---------------------------------------------------
Thomas R. Brown
/s/ Peter E. Flynn Director November 27, 1996
- ---------------------------------------------------
Peter E. Flynn
/s/ Steven J. Hamerslag Director November 27, 1996
- ---------------------------------------------------
Steven J. Hamerslag
/s/ Jeffrey J. Michael Director November 27, 1996
- ---------------------------------------------------
Jeffrey J. Michael
</TABLE>
II-3
<PAGE> 13
CORVEL CORPORATION
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Sequentially
Numbered
Exhibit Description Page
- ------- ----------- ------------
<S> <C> <C>
5.1 Opinion of Brobeck, Phleger & Harrison LLP . . . . . . . . . . . . . . . . . .
10.1 Form S-3 Registration Agreement between and among CorVel Corporation,
North Star Universal, Inc. and ENStar Inc. entered into
as of November 25, 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . .
23.1 Consent of Ernst & Young LLP . . . . . . . . . . . . . . . . . . . . . . . . .
23.2 Consent of Brobeck, Phleger & Harrison LLP (Included in the Opinion
of Counsel filed as Exhibit 5.1 hereto) . . . . . . . . . . . . . . . . . . .
24.1 Power of Attorney (Included on page II-3
of this Registration Statement) . . . . . . . . . . . . . . . . . . . . . . .
</TABLE>
II-4
<PAGE> 1
Exhibit 5.1
November 27, 1996
CorVel Corporation
1920 Main Street, Suite 1090
Irvine, California 92715
Ladies and Gentlemen:
We have acted as counsel to CorVel Corporation (the
"Company"), a Delaware corporation, in connection with its registration of
200,000 shares of Common Stock (the "Common Stock") as described in the
Company's Registration Statement on Form S-3, filed with the Securities and
Exchange Commission under the Securities Act of 1933, as amended (the
"Registration Statement").
It is our opinion that the Common Stock, when sold in
accordance with the Registration Statement, will be validly issued, fully paid
and nonassessable.
We consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and to the reference to this firm under the caption
"Legal Matters" in the Prospectus which is part of the Registration Statement.
Very truly yours,
/s/ BROBECK, PHLEGER & HARRISON LLP
-----------------------------------
BROBECK, PHLEGER & HARRISON LLP
<PAGE> 1
Exhibit 10.1
FORM S-3 REGISTRATION AGREEMENT
THIS FORM S-3 REGISTRATION AGREEMENT (the "Agreement") is made and
entered into as of November 25, 1996 between and among CORVEL CORPORATION, a
Delaware corporation (the "Company"), and NORTH STAR UNIVERSAL, INC., a
Minnesota corporation ("North Star"), and ENSTAR INC., a Minnesota corporation
and wholly-owned subsidary of North Star (the "Selling Stockholder"), in
connection with the preparation and filing by the Company of a Form S-3
Registration Statement (the "Registration Statement") with the Securities and
Exchange Commission (the "SEC") for the offering from time to time of up to
200,000 shares (the "Shares") of Common Stock, $.0001 par value, of the Company
(the "Common Stock") to be sold by the Selling Stockholder.
Section 1. Selling Stockholder and North Star Representations.
The Selling Stockholder and North Star each hereby certify to the Company, for
the purpose of the registration of the Shares to be registered for the Selling
Stockholder's account, that the statements made below are true and correct.
(a) The Selling Stockholder is the beneficial owner, as defined in
Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), as of the date hereof and as of effective date of the Registration
Statement, of the Shares as set forth under the caption "Selling Stockholder"
and "Sale of Shares" in the prospectus filed as part of the effective
Registration Statement (the "Prospectus").
(b) Each of the Selling Stockholder and North Star has reviewed
the statements contained under the headings "Selling Stockholder" and "Sale of
the Shares" in the Prospectus and in the second paragraph on page 1 of the
Prospectus and hereby confirms that such statements are true and correct as of
the date hereof and as of the effective date of the Registration Statement.
(c) Each of the Selling Stockholder and North Star understands
that the Selling Stockholder will be required to deliver a copy of the final
Prospectus provided by the Company in connection with each sale that the
Selling Stockholder may make of registered Shares.
(d) During such time as the Selling Stockholder may be attempting
to sell the registered Shares, neither the Selling Stockholder nor North Star
will bid for or purchase any of the Company's outstanding securities or attempt
to induce any person to purchase such securities, other than as permitted under
the Exchange Act, and rules promulgated thereunder, including, without
limitation, Rules 10b-6 and 10b-7, which provisions may limit the timing of
purchases and sales of the Company's Common Stock by Selling Stockholder or
North Star, or engage in any "stabilization" activity in connection with the
Company's outstanding securities.
<PAGE> 2
(e) The Selling Stockholder will not offer or sell the Shares in
any state unless the Shares have been registered or qualified for offer or sale
in such state or unless the offer or sale of the Shares is exempt from
registration or qualification in such state. Each of the Selling Stockholder
and North Star understands that the Company bears no responsibility for
registering or qualifying the Shares in any state.
(f) Each of the Selling Stockholder and North Star understands
that the Selling Stockholder, and any other person who participates with the
Selling Stockholder in the sale of the registered Shares, may be deemed to be
an "underwriter" as defined in the Securities Act of 1933, as amended (the
"Securities Act").
(g) Neither the Selling Stockholder nor North Star will make any
representation concerning the Company, or deliver any written materials to any
buyer of the registered Shares other than the prospectus provided by the
Company.
(h) Each of the Selling Stockholder and North Star will promptly
notify the Company if there is any change in any of the foregoing statements
prior to the time all of the registered Shares have been sold.
Section 2. Registration Expenses. The Selling Stockholder and
North Star jointly and severally shall, whether or not the Registration
Statement is declared effective, pay all of the costs and expenses of the
Company (in addition to all Selling Stockholder's costs) incident to the
preparation and filing of the Registration Statement, including, but not
limited to the fees and expenses of the Company's counsel, the fees and
expenses of the Company's accountants, and all other costs and expenses
incident to the preparation, printing and filing under the Securities Act of
the Registration Statement, and the costs incurred in connection with the
registration or qualification of the Shares under the laws of various
jurisdictions.
Section 3. Period of Effectiveness; Notice of Developments. The
Company shall keep the Registration Statement effective for 60 days after the
date of its effectiveness. The Company shall notify the Selling Stockholder
and North Star promptly, and (if requested) confirm such notice in writing, (i)
when the Prospectus or any prospectus supplement or post-effective amendment
has been filed, and, with respect to the Registration Statement or any
post-effective amendment, when the same has become effective, (ii) of any
request by the SEC or any other Federal or state governmental authority during
the period of effectiveness of the Registration Statement for amendments or
supplements to the Registration Statement or related Prospectus or for
additional information, (iii) of the issuance by the SEC or any other Federal
or state governmental authority of any stop order suspending the effectiveness
of the Registration Statement or the initiation of any proceedings for that
purpose, (iv) of the receipt by the Company of any notification with respect to
the suspension of the registration or qualification or exemption from
registration or qualification of any of the Shares for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose, (v) of the
happening of any event which makes any statement made in the Registration
Statement or related Prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or which
requires the making
2
<PAGE> 3
of any changes in such Registration Statement, Prospectus or documents so that,
in the case of the Registration Statement, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, and
that in the case of the Prospectus, it will not contain any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and (vi) of the
Company's reasonable determination that a post-effective amendment to the
Registration Statement would be appropriate. The Selling Stockholder agrees
that, upon receipt of any notice from the Company of the happening of any event
of the kind described in clause (ii), (iii), (iv), (v) or (vi) above, the
Selling Stockholder will forthwith discontinue disposition of the Shares
covered by the applicable Registration Statement or Prospectus until the
Selling Stockholder's receipt of the copies of the supplemented or amended
Prospectus, or until it is advised in writing by the Company that the use of
the applicable Prospectus may be resumed, and has received copies of any
additional or supplemental filings that are incorporated or deemed to be
incorporated by reference in such Prospectus.
Section 4. Indemnification.
(a) The Company shall indemnify and hold harmless the Selling
Stockholder, each of its directors, each of its officers and each person, if
any, who controls the Selling Stockholder within the meaning of the Securities
Act, including, without limitation, North Star, against any losses, claims,
damages or liabilities (or actions in respect thereof) (collectively,
"Losses"), to which the Selling Stockholder, director, officer or controlling
person may become subject, under the Securities Act or otherwise, insofar as
such Losses are caused by any untrue statement or alleged untrue statement of
any material fact contained in the Registration Statement, the Prospectus
contained therein, or any amendment or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and will reimburse any legal or other expenses reasonably
incurred by the Selling Stockholder in connection with investigating or
defending any such Losses; provided, however, that the Company will not be
liable in any such case to the Selling Stockholder or to North Star to the
extent that any such Losses arise out of or are based upon an untrue statement
or alleged untrue statement or omission or alleged omission so made in
conformity with written information furnished by the Selling Stockholder or
North Star specifically for use in the preparation thereof.
(b) Further, the Company shall not be liable to the Selling
Stockholder or North Star to the extent that any such Losses arise out of or
are based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any preliminary prospectus if either (A) (i) the
Selling Stockholder failed to send or deliver a copy of the Prospectus with or
prior to the delivery of written confirmation of the sale by the Selling
Stockholder of any Shares to the person asserting the claim from which such
Losses arise and (ii) the Prospectus would have completely corrected such
untrue statement or alleged untrue statement or such omission or alleged
omission; or (B) (x) such untrue statement or alleged
3
<PAGE> 4
untrue statement, omission or alleged omission is completely corrected in an
amendment or supplement to the Prospectus and (y) having previously been
furnished by or on behalf of the Company with copies of the Prospectus as so
amended or supplemented, the Selling Stockholder thereafter fails to deliver
such Prospectus as so amended or supplemented, prior to or concurrently with
the sale of any Shares to the person asserting the claim from which such Losses
arise.
(c) The Selling Stockholder and North Star shall indemnify and
hold harmless the Company, each of its directors, each of its officers who have
signed the Registration Statement, and each person, if any, who controls the
Company, within the meaning of the Securities Act, against any Losses to which
the Company, or any such director, officer or controlling person may become
subject under the Securities Act or otherwise, insofar as such Losses are
caused by any untrue or alleged untrue statement of any material fact contained
in the Registration Statement, the Prospectus contained therein or amendment or
amendments or supplement thereto, or arise out of or are based upon the
omission or the alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
and will reimburse any legal or other expenses reasonably incurred by the
Company or any such director, officer or controlling person in connection with
investigating or defending any such Losses; in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was so made in reliance upon and in conformity
with written information furnished by the Selling Stockholder or North Star for
use in the preparation thereof (including without limitation the information
referred to in Section 1(b) above).
(d) Promptly after receipt by an indemnified party pursuant hereto
of notice of any claim to which indemnity would apply or the commencement of
any action, such indemnified party will, if a claim thereof is to be made
against the indemnifying party pursuant hereto, notify the indemnifying party
of the commencement thereof; but the omission to so notify the indemnifying
party will not relieve it from any liability which it may have to any
indemnified party otherwise than hereunder. In case such action is brought
against any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
in, and, to the extent that it may wish, jointly with any other indemnifying
party similarly notified, assume the defense thereof, with counsel satisfactory
to such indemnified party.
Section 5. Notices. All notices, requests, demands and other
communications pertaining to the subject matter of this Agreement shall be in
writing and shall be deemed to be duly rendered upon personal delivery, one (1)
day after delivery to a reputable overnight courier, or five (5) days after
deposit in the United States mail, postage prepaid, registered or certified
mail with return receipt requested and addressed as follows, or as the other
party may hereafter designate to the other in writing:
4
<PAGE> 5
<TABLE>
<S> <C>
To Company: CorVel Corporation
1920 Main Street, Suite 1090
Irvine, California 92714
Attention: V. Gordon Clemons
To Selling Stockholder: ENStar Inc.
6479 City West Parkway
Eden Prairie, Minnesota 55344-3246
Attention: Peter E. Flynn
To North Star: North Star Universal, Inc.
6479 City West Parkway
Eden Prairie, Minnesota 55344-3246
Attention: Peter E. Flynn
</TABLE>
Section 6. Attorneys' Fees. In the event of any dispute or
litigation arising out of or relating to the meaning, interpretation or breach
of this Agreement or, compliance or non-compliance with the terms of this
Agreement, the prevailing party or prevailing parties shall be entitled to
reasonable attorneys' fees and costs.
Section 7. Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of the successors, assigns, heirs,
executors and legal representatives of each of the parties hereto, but shall
not be assigned or delegated without the prior written consent of the other
party.
Section 8. Counterparts. This Agreement may be executed in one
or more counterparts, and all so executed shall constitute one agreement,
notwithstanding that each of the parties hereto are not signatory to the
original of the same counterpart of this Agreement.
Section 9. Governing Law. This Agreement has been executed and
shall be governed by and construed in accordance with the laws of the State of
Delaware.
Section 10. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to
be invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the
parties shall negotiate in good faith to modify this Agreement and to preserve
each party's anticipated benefits under this Agreement.
Section 11. Entire Agreement. This Agreement constitutes the
entire agreement between the parties hereto, and supersedes all other prior
agreements and undertakings, both written and oral, between the parties, with
respect to the subject matter hereof.
5
<PAGE> 6
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
THE COMPANY:
CORVEL CORPORATION
By: /s/ Richard J. Schweppe
-------------------------------------------
Title: Chief Financial Officer
----------------------------------------
SELLING STOCKHOLDER:
ENSTAR INC.
By: /s/ Peter E. Flynn
-------------------------------------------
Title: Executive Vice President
----------------------------------------
NORTH STAR UNIVERSAL, INC.:
By: /s/ Peter E. Flynn
-------------------------------------------
Title: Chief Financial Officer
----------------------------------------
6
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
the Registration Statement (Form S-3) and related prospectus of CorVel
Corporation for the registration of 200,000 shares of its common stock and the
incorporation by reference therein of our report dated May 8, 1996, with
respect to the consolidated financial statements and schedule of CorVel
Corporation included in its Annual Report on Form 10- K for the year ended
March 31, 1996 filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
-------------------------------
Ernst & Young LLP
Orange County, California
December 2, 1996
II-6
